Duplex Analysis: Should I buy this deal?
I have a duplex under contract in Okahoma City in a class C neighborhood for $72,500. It has tenants in place paying $525 each. One is month to month and the other lease is up in April but I've talked to both and they want to stay and are willing to renew. It has property management currently at 7%. Manager says they have been great tenants and pay on time. Property tax is 1100 and Insurance will be $75 to $100 per month. I would be responsible for water which has averaged $130 per month. Would you all buy this deal? Initially I assumed the cash flow would be better than it is. The place is pretty run down and with some rehab rents could be raised to $700 per side I believe. I'd like to wait to do any renovations though until my cash reserves are a little higher. Please let me know your thoughts.